By next week....we shall be welcoming in 2010, so I will be looking forward to try to learn more about trading. Beside that...frankly nothing else to look forward to. All else are false esp for an old man like myself. Don't want to be the old fool wishing upon some useless star and kept on waiting and waiting for things to happen and in the end.....still disappointed. Why meh? Well...I will be the last person on earth for people to want to be with unless they have problems and need my help. So....I don't think I want have this burden in my thought next year when I have both hands full with my own needs. I have to continue to learn about trading plus the ability to have a good mental strength to go with it.
So....2010, will be year for me and it's my last chance to make it. Make it or die trying!!! As failure is never the option!
Saturday, December 26, 2009
Friday, December 25, 2009
2009 - review
2009 to me....is a watershed year and at last, I am willing to go out to learn more about how to trade well and to make it as a "trader". Not just to give me...a passive income but to help me "grow" as a trader be it in forex and stocks.
After spending money to attend the courses for both...and also after do small live-trades for both with what I was taught from the courses, I found out that what they really teach is just very fundamental. For that level....doubt anyone can really made any money using them when trading. Yes...true, there are certain basic concepts used but truly if one is to really seriously want to be a so-called "trader" who can have a higher chance of winning...then one must be seriously attend more training or do more self study. Yes...there are lots of this self-help or self study stuffs in the internet for free. That is why....I copied quite a bit into my blog to go thru whenever I need to reflesh my thoughts.
My aim for 2010....is to make it a profitable for me as a "small-time trader" until I am out from my present job. By then...I should have enough experience to go "bigger" as a full-time trader. Frankly...I have got myself about 8 to 9 mths to gain this experience. After that....it is also like no choice but to make it "happen" or to die trying. Don't think.....I will change for a 9 to 5 job unless suddenly even what I supposed to learn also cannot "work". Remember...I have already said that I will have to die trying so it would take a totally different path to change my mind.
From my short experience using the system...I truly believed that with a proper plan and good money management, I should be able to make it "work" for me as a "trader". The only thing left is whether a hugely successful one or a mediocre one! For that, then maybe have to depend on my luck and fate.
After spending money to attend the courses for both...and also after do small live-trades for both with what I was taught from the courses, I found out that what they really teach is just very fundamental. For that level....doubt anyone can really made any money using them when trading. Yes...true, there are certain basic concepts used but truly if one is to really seriously want to be a so-called "trader" who can have a higher chance of winning...then one must be seriously attend more training or do more self study. Yes...there are lots of this self-help or self study stuffs in the internet for free. That is why....I copied quite a bit into my blog to go thru whenever I need to reflesh my thoughts.
My aim for 2010....is to make it a profitable for me as a "small-time trader" until I am out from my present job. By then...I should have enough experience to go "bigger" as a full-time trader. Frankly...I have got myself about 8 to 9 mths to gain this experience. After that....it is also like no choice but to make it "happen" or to die trying. Don't think.....I will change for a 9 to 5 job unless suddenly even what I supposed to learn also cannot "work". Remember...I have already said that I will have to die trying so it would take a totally different path to change my mind.
From my short experience using the system...I truly believed that with a proper plan and good money management, I should be able to make it "work" for me as a "trader". The only thing left is whether a hugely successful one or a mediocre one! For that, then maybe have to depend on my luck and fate.
Thursday, December 24, 2009
Dollar 2010: Rate, and Not Great Expectations
You can stop worrying about the weak dollar—you can also stop hoping about a strong one.
Most currency market analysts expect the U.S. currency to build on its 5-percent December bounce, as traders continue to factor in a stonger U.S. economy and an inevitable Fed tighening. Beyond that, however, a lot depends on just how poorly things go for other major currencies, such as the euro, pound and yen.
"The dollar had become oversold," says Michael Woolfolk, senior currency strategist at Bank of New York Mellon. "I see this as year-end positioning with a little added move by speculators."
Woolfolk may be among the least optimistic about the chance of a strong dollar run in 2010, but that's a very relative statement. Most expect modest gains, but no one is expecting a strong, broad-based rally.
"The dollar is very low; it has to move up," says economist Robert Brusca, chief economist with FAO Economics.
In general, analysts expect the dollar to remain weak against the currencies of commodities-driven economies such as Canada, Australia and Brazil, while making gains against those of Japan, Britain and the European Union.
At the same time, after a multi-year bear market that took the dollar to record lows against the euro and parity with the Swiss Franc and Canadian Dollar, analysts say the worst is definitely over.
"There's been a sea change in sentiment," says Boris Schlossberg, of GFT Forex. "The whole thesis began to change when [Novermber] payrolls came out," he explains, referring to the Dec. 4 government report showing that the economy shed just 11,000 jobs, the least in almost two years.
"Fundamental factors will be more favorable for the dollar next year," adds Vassili Serebriakov, a currency strategist at Wells Fargo, which is among the most bullish on the U.S. currency.
Fundamental Case
Those fundmaentals turn on this oft-cited scenraio: The U.S. recovery will be swifter and stronger than that of most other G7 countries, prompting the Fed to tighten monetary policy first.
At the same time, the U.S. economy is expected to be less vulnerable to future credit market shocks, which will help remind investors of its traditional safe-haven status.
"Rates are going to follow what's happening in the economy," says David Pierce, director at GPS Capital Markets. "We'll see a little more strength short term, due to continuing economic problems overseas and the weakness in the price of gold lately."
Though the Fed is widely expected to raise the federal funds rate no sooner than mid-year, the central bank is likely to undo some of its non-traditional, quantatative easing measures sooner, perhaps as soon as the first quarter.
"One of the big hurdles is the exiting of the Fed from the MBS [mortgage-backed securties] program," says Jacob Oubina, a strategist with Forex.com. He and others suspect that such a move will add at least half a percentage point to mortgage rates.
"The Fed policy flooded the market with cheap-dollar liquidy," adds Serebriakov.
Though there's some concern that problems in the U.S. commercial real estate market could weigh on the U.S. economy, strategists say there's more potential for trouble abroad, which will provide consistent support for the dollar.
"People are beginning to get concnerned about the sovereign credit values in Europe," says Schlossberg. "Portgual, Greece, Ireland, Spain--all of those countries have massive budget deficits."
When debt and budget alarms went off in Greece and Dubai recently, the message was loud and clear to some.
"A flight to quality [the U.S.]? I think there was probably some of that," says Brusca. "These are mini-events that remind people that there is still risk out there."
One final tailwind for the dollar is the apparent end of the gold rally, which during its heydey prompted many an investor to sell dollars to buy gold.
Exchanging Places
Conventional wisdom would argue all of this would make the dollar a screaming buy, yet no one is predicting anything resembling the great bull run of 1995-2001. That's when the dollar pulled out of its last major skid and went on to hit one record highs against other currencies.
Nevertheless, if the forecasts are reasonably correct, the U.S. currency will end 2010 far away from the lows of 2008, when the dollar hit a record low of about 1.60 against the euro and more than two dollars to the British pound.
Here's a snapshot of how the dollar will play out against the big three.
Euro
"The most bullish case, " says Scholossberg, is 1.30-1.35. Wells Fargo says 1.32 is possible, but a consensus could be made around the 1.35-level, which is hardly a greap leap from the current 1.42.
"Europe has more problems going on than we do," adds Pierce.
European exporters would certainly welcome a weakening single currency, although the European Central Bank is notoriously paranoid about inflation risks. It resorted to little unconventional easing during the crisis and will always err on the side of tighter monetary policy.
Pound
"The U.K. is the weakest link of the G7 economies," says Woolfork, who says a 1.53 level is likely, but a 1.40 level remains possible if both the Fed and ECB raise rates. The most likely range looks to be 1.45-1.50, based on the comments of a half dozen analysts and their forecasts.
Not only has the U.K. economy yet to return to growth, the Bank of England is thought to be considering more quantatative easing, thus making the domestic comditions, more than anything, the key driver of the pound.
There is one, wild card, however.
"Though the U.K. may be the most vulnerable, it is the most levered to the financial markets," notes Schlossberg. "If the rally stalls, it creates a massive amount of pressure on the big firms, but if we see Dow 12,000, then the pound could be back to 1.70-1.75."
Yen
Here interest rate differentials holding the key.
"The Bank of Japan will be at zero rates for as far as the eye can see," says Oubina of Forex.com, whose forecast calls for the dollar/yen at 98 mid-year and 105 by the end of 2010.
Virtually every forecast has the dollar/yen rate back around 100 by year's end, a little more 20-percent from current levels.
"Japan has had a great deal of difficulty pulling out of its deflationary problems," says Wooolfork, who also expects no change in official rates during 2010. "That will leave the yen the first choice for the carry trade," usurping the role of the dollar for much of 2009 as investors toyed with the prospect of another commodities boom.
China is also a consideration.
There it is a case of trade policy rather than exchange rates. With the Chinese currency tied to a basket of currencies, it's value against the dollar is essentially fixed, making it immune to shifting global fundmentals.
The evolution of China's economic recovery will play the determining role, analysts say. By mid-year, when its sustainability is clear, some expect the government to follow up on recent hints and return to a policy of incremental, yearly adjustments, to allow appreciation.
Until then, the dollar will make its mark against the currencies of other major trading partners, even if it is tends toward the unremarkable.
"It may not be that fundamentals are that attractive in the U.S.," says Serebriakov. "There are very few alternatives."
Most currency market analysts expect the U.S. currency to build on its 5-percent December bounce, as traders continue to factor in a stonger U.S. economy and an inevitable Fed tighening. Beyond that, however, a lot depends on just how poorly things go for other major currencies, such as the euro, pound and yen.
"The dollar had become oversold," says Michael Woolfolk, senior currency strategist at Bank of New York Mellon. "I see this as year-end positioning with a little added move by speculators."
Woolfolk may be among the least optimistic about the chance of a strong dollar run in 2010, but that's a very relative statement. Most expect modest gains, but no one is expecting a strong, broad-based rally.
"The dollar is very low; it has to move up," says economist Robert Brusca, chief economist with FAO Economics.
In general, analysts expect the dollar to remain weak against the currencies of commodities-driven economies such as Canada, Australia and Brazil, while making gains against those of Japan, Britain and the European Union.
At the same time, after a multi-year bear market that took the dollar to record lows against the euro and parity with the Swiss Franc and Canadian Dollar, analysts say the worst is definitely over.
"There's been a sea change in sentiment," says Boris Schlossberg, of GFT Forex. "The whole thesis began to change when [Novermber] payrolls came out," he explains, referring to the Dec. 4 government report showing that the economy shed just 11,000 jobs, the least in almost two years.
"Fundamental factors will be more favorable for the dollar next year," adds Vassili Serebriakov, a currency strategist at Wells Fargo, which is among the most bullish on the U.S. currency.
Fundamental Case
Those fundmaentals turn on this oft-cited scenraio: The U.S. recovery will be swifter and stronger than that of most other G7 countries, prompting the Fed to tighten monetary policy first.
At the same time, the U.S. economy is expected to be less vulnerable to future credit market shocks, which will help remind investors of its traditional safe-haven status.
"Rates are going to follow what's happening in the economy," says David Pierce, director at GPS Capital Markets. "We'll see a little more strength short term, due to continuing economic problems overseas and the weakness in the price of gold lately."
Though the Fed is widely expected to raise the federal funds rate no sooner than mid-year, the central bank is likely to undo some of its non-traditional, quantatative easing measures sooner, perhaps as soon as the first quarter.
"One of the big hurdles is the exiting of the Fed from the MBS [mortgage-backed securties] program," says Jacob Oubina, a strategist with Forex.com. He and others suspect that such a move will add at least half a percentage point to mortgage rates.
"The Fed policy flooded the market with cheap-dollar liquidy," adds Serebriakov.
Though there's some concern that problems in the U.S. commercial real estate market could weigh on the U.S. economy, strategists say there's more potential for trouble abroad, which will provide consistent support for the dollar.
"People are beginning to get concnerned about the sovereign credit values in Europe," says Schlossberg. "Portgual, Greece, Ireland, Spain--all of those countries have massive budget deficits."
When debt and budget alarms went off in Greece and Dubai recently, the message was loud and clear to some.
"A flight to quality [the U.S.]? I think there was probably some of that," says Brusca. "These are mini-events that remind people that there is still risk out there."
One final tailwind for the dollar is the apparent end of the gold rally, which during its heydey prompted many an investor to sell dollars to buy gold.
Exchanging Places
Conventional wisdom would argue all of this would make the dollar a screaming buy, yet no one is predicting anything resembling the great bull run of 1995-2001. That's when the dollar pulled out of its last major skid and went on to hit one record highs against other currencies.
Nevertheless, if the forecasts are reasonably correct, the U.S. currency will end 2010 far away from the lows of 2008, when the dollar hit a record low of about 1.60 against the euro and more than two dollars to the British pound.
Here's a snapshot of how the dollar will play out against the big three.
Euro
"The most bullish case, " says Scholossberg, is 1.30-1.35. Wells Fargo says 1.32 is possible, but a consensus could be made around the 1.35-level, which is hardly a greap leap from the current 1.42.
"Europe has more problems going on than we do," adds Pierce.
European exporters would certainly welcome a weakening single currency, although the European Central Bank is notoriously paranoid about inflation risks. It resorted to little unconventional easing during the crisis and will always err on the side of tighter monetary policy.
Pound
"The U.K. is the weakest link of the G7 economies," says Woolfork, who says a 1.53 level is likely, but a 1.40 level remains possible if both the Fed and ECB raise rates. The most likely range looks to be 1.45-1.50, based on the comments of a half dozen analysts and their forecasts.
Not only has the U.K. economy yet to return to growth, the Bank of England is thought to be considering more quantatative easing, thus making the domestic comditions, more than anything, the key driver of the pound.
There is one, wild card, however.
"Though the U.K. may be the most vulnerable, it is the most levered to the financial markets," notes Schlossberg. "If the rally stalls, it creates a massive amount of pressure on the big firms, but if we see Dow 12,000, then the pound could be back to 1.70-1.75."
Yen
Here interest rate differentials holding the key.
"The Bank of Japan will be at zero rates for as far as the eye can see," says Oubina of Forex.com, whose forecast calls for the dollar/yen at 98 mid-year and 105 by the end of 2010.
Virtually every forecast has the dollar/yen rate back around 100 by year's end, a little more 20-percent from current levels.
"Japan has had a great deal of difficulty pulling out of its deflationary problems," says Wooolfork, who also expects no change in official rates during 2010. "That will leave the yen the first choice for the carry trade," usurping the role of the dollar for much of 2009 as investors toyed with the prospect of another commodities boom.
China is also a consideration.
There it is a case of trade policy rather than exchange rates. With the Chinese currency tied to a basket of currencies, it's value against the dollar is essentially fixed, making it immune to shifting global fundmentals.
The evolution of China's economic recovery will play the determining role, analysts say. By mid-year, when its sustainability is clear, some expect the government to follow up on recent hints and return to a policy of incremental, yearly adjustments, to allow appreciation.
Until then, the dollar will make its mark against the currencies of other major trading partners, even if it is tends toward the unremarkable.
"It may not be that fundamentals are that attractive in the U.S.," says Serebriakov. "There are very few alternatives."
How to make a living trading the forex market
Making a living trading from home is the dream of just about every trader and active investor. Nial Fuller offers his simple trading strategies, without the complex indicators or heavy charts, that can be used by anyone anywhere to make a killing and earn a living.
Nial Fuller was bitten by the trading bug at the age of sixteen, and ever since he’s thought of little else other than how to make a fortune as a home-based trader. He bought his first stock in 2000, when he was just a High School senior, and then spent the next decade chasing his childhood dream. Finally, in 2004, nearly bankrupt and ready to quit, Nial Fuller had an epiphany that changed everything–and since then he hasn’t had a losing year and rarely even a losing month. His trading account has mushroomed . What did Nial Fuller discover that makes him stand out from the rest? How did he achieve trading success and continue to bank large trading returns.? Find out how at www.learntotradethemarket.com
What you won’t find is mathematical formulas, complex technical indicators, heavy charts, or elaborate software demands. What you will find is a simple, straightforward approach to home-based trading that can be used by virtually anyone, anywhere. Unlike most experts teaching traders today, Nial Fuller has actually made it as a home-based trader. In his trading course , Nial outlines his low-risk trading strategies and explains how to use them to trade forex and futures markets–his preferred vehicles.
Nial Fuller deals in reality. If you want to really learn to trade for real profits, not hypothetical, mumbo-back-tested programs, this website is a must. New traders will find great benefit from looking over Nial’s shoulder as he generously shares with the trader, the valuable knowledge he has gained over the years.. You’ve heard what the experts have to say about trading the markets. Now find out how it’s really done from a consummate pro,. Nial runs a private trading website where he shares a wealth of free knowledge, his home study course informaiton is also on the website. www.learntotradethemarket.com
Becoming A full Time Trader -Developing Forex Systems - Nial Fuller
You only need to master one trading setup to be a consistently profitable trader.
Screen time will allow you to master one setup.
After you have mastered one setup “own it” you can add another setup.
This can be an ongoing process developing your own style.
The best setup to begin with is the one that you see and understand easiest. If you are forcing yourself to learn a setup because you believe another person is successful using it you may be taking the longer route to profitability. We are all different . Our brains and personalities will gravitate to different setups. This is also true of exit techniques. Most traders I hear from lengthen their road to profitability by trying to apply too many concepts before owning the first one. They have studied a myriad of techniques but have yet to master any. This allows them to talk about trading but unable to consistently trade profitably.
The first decision to make is; do you desire to be a counter trend trader? or a with the trend trader? Eventually, you can be both. At the beginning, or a new beginning perhaps, you will do best choosing to master a setup and follow the trend. If you have been at this game for awhile and are not yet consistently profitable you know what I am saying is correct.
This site contains trading techniques and setups with the intent that it will aid you in creating “your” trading style. My personal trading style is a combination of various styles and setups.
I trust this website will be an exercise in my personal understanding of my own style allowing all to benefit.
Nial Fuller was bitten by the trading bug at the age of sixteen, and ever since he’s thought of little else other than how to make a fortune as a home-based trader. He bought his first stock in 2000, when he was just a High School senior, and then spent the next decade chasing his childhood dream. Finally, in 2004, nearly bankrupt and ready to quit, Nial Fuller had an epiphany that changed everything–and since then he hasn’t had a losing year and rarely even a losing month. His trading account has mushroomed . What did Nial Fuller discover that makes him stand out from the rest? How did he achieve trading success and continue to bank large trading returns.? Find out how at www.learntotradethemarket.com
What you won’t find is mathematical formulas, complex technical indicators, heavy charts, or elaborate software demands. What you will find is a simple, straightforward approach to home-based trading that can be used by virtually anyone, anywhere. Unlike most experts teaching traders today, Nial Fuller has actually made it as a home-based trader. In his trading course , Nial outlines his low-risk trading strategies and explains how to use them to trade forex and futures markets–his preferred vehicles.
Nial Fuller deals in reality. If you want to really learn to trade for real profits, not hypothetical, mumbo-back-tested programs, this website is a must. New traders will find great benefit from looking over Nial’s shoulder as he generously shares with the trader, the valuable knowledge he has gained over the years.. You’ve heard what the experts have to say about trading the markets. Now find out how it’s really done from a consummate pro,. Nial runs a private trading website where he shares a wealth of free knowledge, his home study course informaiton is also on the website. www.learntotradethemarket.com
Becoming A full Time Trader -Developing Forex Systems - Nial Fuller
You only need to master one trading setup to be a consistently profitable trader.
Screen time will allow you to master one setup.
After you have mastered one setup “own it” you can add another setup.
This can be an ongoing process developing your own style.
The best setup to begin with is the one that you see and understand easiest. If you are forcing yourself to learn a setup because you believe another person is successful using it you may be taking the longer route to profitability. We are all different . Our brains and personalities will gravitate to different setups. This is also true of exit techniques. Most traders I hear from lengthen their road to profitability by trying to apply too many concepts before owning the first one. They have studied a myriad of techniques but have yet to master any. This allows them to talk about trading but unable to consistently trade profitably.
The first decision to make is; do you desire to be a counter trend trader? or a with the trend trader? Eventually, you can be both. At the beginning, or a new beginning perhaps, you will do best choosing to master a setup and follow the trend. If you have been at this game for awhile and are not yet consistently profitable you know what I am saying is correct.
This site contains trading techniques and setups with the intent that it will aid you in creating “your” trading style. My personal trading style is a combination of various styles and setups.
I trust this website will be an exercise in my personal understanding of my own style allowing all to benefit.
Trading Price Action Using Your Intuition
Trading Price Action is truly a game of “gut feel” ” trading strategy” and “price action charts”
The market is one giant poker game, and not only do you need a good
knowledge of the game itself, one must learn to read the emotion of all the
players at the poker table.
As a price action forex trader, I can only offer my personal trading insights and the things I have picked up
over the years that have helped me with trading strategies and my general approach to reading charts..
I can not give you all of the “gut feel” qualities which is a larger part of the ingredient to long term success, this market intuition and emotional element will only come with learning and trading experience. Nobody will want to tell you this though.
I am here to tell you that no matter what trading strategy you learn, it will require screen time, patience and absolute discipline to trade it successfully.
There are 2 levels to be aware of.
1. Part of trading is the strategy
2. Part of trading is the emotional element, and the ability to read the market with “good intuition and feel”.
There is no mechanical approach that I am aware of that makes money long
term, all methods I trade and that others trade that I know of, use a basic
“rule set”, and basic “trading plan condition” to then use pull the trigger on price action related setups etc.
For example, a trading plan may look like the following…
One might have 3 pre conditions,
1. The chart shows a trend within the last 10 days, price has formed a 1 2 3
reversal higher, and is trading near its recent high.
2. The market has pulled back to a support point
3. The market has now formed a “price action signal” condition to confirm a
reversal which may become the entry point.
These may be criteria in a trading plan, but how do we truly filter this,
and say ” ok I will trade this setup, but I wont trade this one, because
of…etc etc.”
As I say to all my students honestly, the greatest traders are in fact, people that can
have a trading plan conditional element, but then use what I call the “gut
feel element” and the “internal emotional filter’, or put simply, they use market experience and screen time to help make quick on the spot trigger decisions.
Thats just a qucik article on the “emotional element” in trading price aciton, and indeed all trading methods, no matter what the educators say, there is always a degree of intuition and awareness that is taking place in our trading, and its time to learn to harness it correctly
The market is one giant poker game, and not only do you need a good
knowledge of the game itself, one must learn to read the emotion of all the
players at the poker table.
As a price action forex trader, I can only offer my personal trading insights and the things I have picked up
over the years that have helped me with trading strategies and my general approach to reading charts..
I can not give you all of the “gut feel” qualities which is a larger part of the ingredient to long term success, this market intuition and emotional element will only come with learning and trading experience. Nobody will want to tell you this though.
I am here to tell you that no matter what trading strategy you learn, it will require screen time, patience and absolute discipline to trade it successfully.
There are 2 levels to be aware of.
1. Part of trading is the strategy
2. Part of trading is the emotional element, and the ability to read the market with “good intuition and feel”.
There is no mechanical approach that I am aware of that makes money long
term, all methods I trade and that others trade that I know of, use a basic
“rule set”, and basic “trading plan condition” to then use pull the trigger on price action related setups etc.
For example, a trading plan may look like the following…
One might have 3 pre conditions,
1. The chart shows a trend within the last 10 days, price has formed a 1 2 3
reversal higher, and is trading near its recent high.
2. The market has pulled back to a support point
3. The market has now formed a “price action signal” condition to confirm a
reversal which may become the entry point.
These may be criteria in a trading plan, but how do we truly filter this,
and say ” ok I will trade this setup, but I wont trade this one, because
of…etc etc.”
As I say to all my students honestly, the greatest traders are in fact, people that can
have a trading plan conditional element, but then use what I call the “gut
feel element” and the “internal emotional filter’, or put simply, they use market experience and screen time to help make quick on the spot trigger decisions.
Thats just a qucik article on the “emotional element” in trading price aciton, and indeed all trading methods, no matter what the educators say, there is always a degree of intuition and awareness that is taking place in our trading, and its time to learn to harness it correctly
Price Action Forex Trading Strategies
What I can honestly tell you is that becoming a successful forex trader requires you to learn at least 3 things.
1. Learn to read Price Action
2 Learn to read Price Action
3. Learn rules 1 and 2.
I’ve been trading this amazing market we call forex for over 7 years now. Boy, it really seems a lot longer! I can’t tell you the number of books, trading courses and mentors I have had to sift through in order to finally reach professional trading status; unfortunately, after looking back, it’s clear that 80% of what I learned was meaningless, while only 20 % has truly helped me develop a winning trading methodology and trading plan. It’s been a long, long road indeed..
Using Price Action methods and developing a strict and accurate money management plan has been my grail to profits. Half my battle is explaining to people that trading is a lot simpler than it appears. People fail because they break too many crucial market rules, and they simply look at markets through the eyes of an uninformed novice. Whilst I’m all for the use of trading methodologies, I don’t believe in mechanical forex systems, and to be frank, I have never seen one work the way it was designed to. My trading strategies involve simple price action analysis, which means I look for certain price patterns and price signals on the charts to be present before entering a trade.
I am passionate about teaching my strategies in order to empower traders by equipping them with the tools and knowledge that will improve their chance of success in this competitive market. My comprehensive forex training home-study course & video mentorship program is designed to train traders to read price action and trade like professionals. My course is filled with solid trading techniques, similar to those used by banks and financial institutions. I am going to teach you powerful and repeatable price action trading setups which I have personally used to profit considerably and consistently.
What makes me different is that I teach you skills for life, not some bogus one-hit-wonder system. We are talking about you going away from my course with a concrete plan of action, powerful entry strategies in hand, and ready to make money. My one promise is that you will finish this course and truly look at trading in a completely different mindset. You’re going to be on your way to Professional trading!
Heres Some of Whats in My Forex Training Course
What I offer is to my knowledge, one of the internets most complete online learning portal with many pages of course content, trading tutorial videos as well as Trading Setups Videos updated on an ongoing basis.
• Advanced Pin Bar Reversal entry
• Inside bar continuations and reversal entry
• The Fakey (inside bar false break) entry
• False breaks from support and resistance
• Hourly chart trend entries
• Low risk trades using intraday price action
• Trendline break entry and exit
• Basic 55% retracements with price action
• Inside bar event areas
• Finding the mean or value point
• Intro to Forex market dynamics,
• Understanding Forex Market behaviour
• Basics of mean reversion.
• Understanding trade setup risk / reward
• How to map short term trends,
• Working with perfect trends
• Using breakouts correctly with price action
• Mapping key market levels and swing points
• False breaks from support and resistance
• Using the 150 and 365 EMA with price action
1. Learn to read Price Action
2 Learn to read Price Action
3. Learn rules 1 and 2.
I’ve been trading this amazing market we call forex for over 7 years now. Boy, it really seems a lot longer! I can’t tell you the number of books, trading courses and mentors I have had to sift through in order to finally reach professional trading status; unfortunately, after looking back, it’s clear that 80% of what I learned was meaningless, while only 20 % has truly helped me develop a winning trading methodology and trading plan. It’s been a long, long road indeed..
Using Price Action methods and developing a strict and accurate money management plan has been my grail to profits. Half my battle is explaining to people that trading is a lot simpler than it appears. People fail because they break too many crucial market rules, and they simply look at markets through the eyes of an uninformed novice. Whilst I’m all for the use of trading methodologies, I don’t believe in mechanical forex systems, and to be frank, I have never seen one work the way it was designed to. My trading strategies involve simple price action analysis, which means I look for certain price patterns and price signals on the charts to be present before entering a trade.
I am passionate about teaching my strategies in order to empower traders by equipping them with the tools and knowledge that will improve their chance of success in this competitive market. My comprehensive forex training home-study course & video mentorship program is designed to train traders to read price action and trade like professionals. My course is filled with solid trading techniques, similar to those used by banks and financial institutions. I am going to teach you powerful and repeatable price action trading setups which I have personally used to profit considerably and consistently.
What makes me different is that I teach you skills for life, not some bogus one-hit-wonder system. We are talking about you going away from my course with a concrete plan of action, powerful entry strategies in hand, and ready to make money. My one promise is that you will finish this course and truly look at trading in a completely different mindset. You’re going to be on your way to Professional trading!
Heres Some of Whats in My Forex Training Course
What I offer is to my knowledge, one of the internets most complete online learning portal with many pages of course content, trading tutorial videos as well as Trading Setups Videos updated on an ongoing basis.
• Advanced Pin Bar Reversal entry
• Inside bar continuations and reversal entry
• The Fakey (inside bar false break) entry
• False breaks from support and resistance
• Hourly chart trend entries
• Low risk trades using intraday price action
• Trendline break entry and exit
• Basic 55% retracements with price action
• Inside bar event areas
• Finding the mean or value point
• Intro to Forex market dynamics,
• Understanding Forex Market behaviour
• Basics of mean reversion.
• Understanding trade setup risk / reward
• How to map short term trends,
• Working with perfect trends
• Using breakouts correctly with price action
• Mapping key market levels and swing points
• False breaks from support and resistance
• Using the 150 and 365 EMA with price action
How to Become Successful at Forex Trading
How Do You Become a Successful Forex Trader?
Most people’s experience in the Forex Market is relatively short and in no way profitable. They hear about the currency market and think it is an easy way to make a lot of money in a very short space of time. Now, I am not saying this can’t be done, because for some this is true, but for the majority it’s certainly not the case. Let me explain in more detail …
In the early stages of most FX trader’s career, the first trading decisions generally come from tips and recommendations from brokers, alert services, forum threads or sometimes even mutual novice trading friends. Then, at some point, traders decide to study the market and attempt to find the perfect system or method to trade with. I am sure you can relate to the following statement; for many traders, the forex market and it’s nuances truly become an obsession that takes up countless hours of searching on the internet and books, forums and DVD’s , in the hope to find the holy grail forex trading system, which they eventually find out, simply does not exist.
Traders develop or buy a system and start trading way too soon. Sometimes it is profitable, but when it has a few losing trades (which is normal), they change the system, read a new trading book, etc. or go back to looking for tips and advice, back to the forums, back to Google, searching for more information. After some time, and after more losses and frustration, most give up and stop trading altogether. Or, they go on the analysing merry-go-round, keep paper trading and never get any financial success from their trading; this is the case for 90% of newbie and intermediate traders.
A few realise that the trading method they are using is not the actually problem and the most important ingredient in their trading is actually they.
In addition, they soon realise that a sound set of trading rules is essential to trading profitably. But if the rules are not followed, they are of no value, and an average trader will have difficulty making a profit with a good trading system. Ironically, a good trader who has skill and a good mind can make a profit with even an average system. Put simply, even with a perfect system, the human mind can stop it making money!
Statistics from surveys of US traders indicate that once a trading methodology is developed by a forex trader, then 80% of the effort in trading is actually trading skills (that includes things like trading psychology and money management).
When the trading system is developed and trading skills are learned, a person starts finally trading properly. Most traders encounter a setback at some stage; either the market conditions change or they don’t follow their rules. However, if good money management is followed, this is not a serious problem. Often, even after winning for several months, after a small set back, many great traders stop trading to evaluate what has happened. This is often a mistake, and is again, the ever-present emotional element which plays in the back of our minds every day we trade. It’s a mistake to interfere with the consistent day to day trading routine, even in the face of losses, the trader has to press on and believe in what they are doing.
Here Some Common Traps Traders Fall Into:
This is where the real decision about the trader’s future is made:
1. They stop trading all together
2. They find a new system, read a new book, and do another course. This can go on forever and successful trading will never happen.
Or
3. They evaluate what really happened. Mostly it will be that market conditions had changed or they didn’t follow their rules.
Then the forex traders who go on to achieve greatness:
(a) Monitor the markets and start trading again but trade small amounts and don’t force trades, they then resume trading normally once they get back on track.
(b) Wait for market conditions that suit their trading style.
This is an important process to go through. Most traders go through this experience 2 or 3 times before they develop the skills to achieve their trading objectives.
Trading success is a result of consistency, discipline and patience and most importantly self belief… When you have a trading plan that involves clean price action strategies, and that is built on practical workable parameters and it suits your personal and financial requirements, and you stick to it, then your forex trading will become more enjoyable and more profitable.
My Forex Trading Course gives a set of trading strategies and rules that help traders develop a trading plan to trade consistently. Click here for information on my forex course.
Good Trading
Most people’s experience in the Forex Market is relatively short and in no way profitable. They hear about the currency market and think it is an easy way to make a lot of money in a very short space of time. Now, I am not saying this can’t be done, because for some this is true, but for the majority it’s certainly not the case. Let me explain in more detail …
In the early stages of most FX trader’s career, the first trading decisions generally come from tips and recommendations from brokers, alert services, forum threads or sometimes even mutual novice trading friends. Then, at some point, traders decide to study the market and attempt to find the perfect system or method to trade with. I am sure you can relate to the following statement; for many traders, the forex market and it’s nuances truly become an obsession that takes up countless hours of searching on the internet and books, forums and DVD’s , in the hope to find the holy grail forex trading system, which they eventually find out, simply does not exist.
Traders develop or buy a system and start trading way too soon. Sometimes it is profitable, but when it has a few losing trades (which is normal), they change the system, read a new trading book, etc. or go back to looking for tips and advice, back to the forums, back to Google, searching for more information. After some time, and after more losses and frustration, most give up and stop trading altogether. Or, they go on the analysing merry-go-round, keep paper trading and never get any financial success from their trading; this is the case for 90% of newbie and intermediate traders.
A few realise that the trading method they are using is not the actually problem and the most important ingredient in their trading is actually they.
In addition, they soon realise that a sound set of trading rules is essential to trading profitably. But if the rules are not followed, they are of no value, and an average trader will have difficulty making a profit with a good trading system. Ironically, a good trader who has skill and a good mind can make a profit with even an average system. Put simply, even with a perfect system, the human mind can stop it making money!
Statistics from surveys of US traders indicate that once a trading methodology is developed by a forex trader, then 80% of the effort in trading is actually trading skills (that includes things like trading psychology and money management).
When the trading system is developed and trading skills are learned, a person starts finally trading properly. Most traders encounter a setback at some stage; either the market conditions change or they don’t follow their rules. However, if good money management is followed, this is not a serious problem. Often, even after winning for several months, after a small set back, many great traders stop trading to evaluate what has happened. This is often a mistake, and is again, the ever-present emotional element which plays in the back of our minds every day we trade. It’s a mistake to interfere with the consistent day to day trading routine, even in the face of losses, the trader has to press on and believe in what they are doing.
Here Some Common Traps Traders Fall Into:
This is where the real decision about the trader’s future is made:
1. They stop trading all together
2. They find a new system, read a new book, and do another course. This can go on forever and successful trading will never happen.
Or
3. They evaluate what really happened. Mostly it will be that market conditions had changed or they didn’t follow their rules.
Then the forex traders who go on to achieve greatness:
(a) Monitor the markets and start trading again but trade small amounts and don’t force trades, they then resume trading normally once they get back on track.
(b) Wait for market conditions that suit their trading style.
This is an important process to go through. Most traders go through this experience 2 or 3 times before they develop the skills to achieve their trading objectives.
Trading success is a result of consistency, discipline and patience and most importantly self belief… When you have a trading plan that involves clean price action strategies, and that is built on practical workable parameters and it suits your personal and financial requirements, and you stick to it, then your forex trading will become more enjoyable and more profitable.
My Forex Trading Course gives a set of trading strategies and rules that help traders develop a trading plan to trade consistently. Click here for information on my forex course.
Good Trading
Forex Psychology - Trading Can Be Addictive
Forex Psychology - TRADING AND ADDICTION
‘Addict’ is a dirty word associated with the perceived down and outs of society, those who sleep on a park bench or live from one needle to another. But addiction invades slowly and surreptitiously and can hit anyone at anytime, although some are more susceptible than others. Genetic components definitely can and do play a role. Research has shown that the brains of addicts metabolize and process their drug quite differently from non-addicts.
So how does forex trading fit into all this? Trading exercises the brain and the will. It involves ongoing analysis and problem solving, and it requires the steady development of performance-based skills. Serious players of chess and poker enjoy similar benefits. Talk to successful athletes and you’ll find they have developed themselves, not just their bodies.
There are times, however, when trading becomes a vehicle for destroying mind and soul. You won’t hear brokers, trading publications, or seminar speakers talking much about this problem, because their common aim is to keep the public trading and buying trading-related products. But trading can become an addictive activity.
Forex Trading coaches and psychologists will talk about losing “discipline”, but rarely will they use the “A” word. Discipline you work on, addictions you get rid of. If you get rid of a trading addiction, there goes the trading coach.
MANY TIMES, LOSSES OF DISCIPLINE IN THE MARKETS ARE RELATED TO ADDICTIVE PATTERNS OF BEHAVIOUR.
An addiction occurs when an activity provides a strong source of stimulation that, over time, a person becomes psychologically and sometimes physically dependent upon. We generally label a behavior as an addiction when people seek out the activity even in the face of demonstrable negative consequences. It is the inability to stop the activity when those consequences interfere with life that marks any addiction.
Let’s look at statistics:
According to research 2 million adults (1% of the population) meet the diagnostic criteria for pathological gambling. Another 4-8 million adults (2-4% of the population) can be considered problem gamblers who are experiencing direct problems as a consequence of gambling. Trading fits into this category. When you enter the market with the pure intention of making as much money as possible, this is gambling. There is no plan, no structure, no goal. The expectations of limitless wealth dance before your eyes and what keeps you hooked is the occasional ‘big fish’ you catch. What is ignored are the overwhelming ones that escape.
In psychological terms this is known as ‘Random Reinforcement’. Random Reinforcement’ can be defined as: ‘having behaviours reinforced with positive or negative results on an inconsistent basis’. So today we perform a certain action and are rewarded for it. The same thing happens tomorrow, but then on the next day, we perform the same action and are punished for it. And so on, in a random manner. This makes effective learning impossible. In the market we cannot avoid this situation. All we can do is recognise it, stick with our rules and discipline and detach ourselves from the money. You have to feel good about your trading, not whether you made or lost money, but on your ability to stick to your rules. Rules and discipline are the only consistent things in an inconsistent darwinian environment.
Further research in psychology and psychiatry finds that between 14 and 16 million Americans meet diagnostic criteria for alcohol abuse or dependence. Between 4-6 million Americans are dependent upon illegal drugs.
Rates of substance abuse among men ages 18-44 are double those of the general population.
A family history of addictive problems is one of the best predictors of risk for addiction. peer influence is another significant risk factor.
According to a research review in the Oxford Textbook, rates of depression are significantly higher among people with addictions than in the general population, with indications that people are using the addictive activities to medicate themselves for the pain of depression. suicide statistics for addicts are high as they often see no other solution to their addiction. this fact is quite pertinent in the present global economic downturn. how many have taken their lives in the past months as their ‘empires’ have collapsed? their addiction to the rushes of adrenaline caused by high-risk thrill-seeking behaviour, without regard for the consequences to themselves or others, has proved as fatal as any other poisonous drug.
Addictions are also most common among individuals with attention deficits and hyperactivity problems and appear to be related to sensation-seeking among those needing stimulation.
Even if we assume that traders do not have more frequent addictive behaviors than the general population, the statistics tell us that, in all likelihood, nearly one trader in every ten has a diagnosable addictive problem.
For the trader with attention deficits who cannot tolerate boredom or lack of stimulation, forex trading provides action.
For the trader who is depressed, trading can provide an escape from the self and a sense of immediate gratification.
Such traders need to trade and keep trading when they have no edge whatsoever.
They lose their money, generate failure experiences for themselves, and create hardships for their families.
For them, it’s not about “discipline” and following trading rules. For the addict, such efforts are useless. The only solution is getting their lives back. And getting the right kind of help. If you see any aspect of yourself in this portrait, do the right thing. for you, and also for those who love you. Trading should expand your control and self-mastery, not become an instrument for their destruction. The sole purpose of trading is to make money, not to feed an emotional deficit.
One question i put to you: ‘what would you do if you could not trade?’ If you draw a blank, you are in trouble. It is like asking the alcoholic ‘what would you do if you had to stop drinking?’ The answer to the latter is usually ‘life is not worth living’. Ask yourself….has trading become so much part of my life that I could not live without it? What would I do INSTEAD of trading if I had to?
‘Addict’ is a dirty word associated with the perceived down and outs of society, those who sleep on a park bench or live from one needle to another. But addiction invades slowly and surreptitiously and can hit anyone at anytime, although some are more susceptible than others. Genetic components definitely can and do play a role. Research has shown that the brains of addicts metabolize and process their drug quite differently from non-addicts.
So how does forex trading fit into all this? Trading exercises the brain and the will. It involves ongoing analysis and problem solving, and it requires the steady development of performance-based skills. Serious players of chess and poker enjoy similar benefits. Talk to successful athletes and you’ll find they have developed themselves, not just their bodies.
There are times, however, when trading becomes a vehicle for destroying mind and soul. You won’t hear brokers, trading publications, or seminar speakers talking much about this problem, because their common aim is to keep the public trading and buying trading-related products. But trading can become an addictive activity.
Forex Trading coaches and psychologists will talk about losing “discipline”, but rarely will they use the “A” word. Discipline you work on, addictions you get rid of. If you get rid of a trading addiction, there goes the trading coach.
MANY TIMES, LOSSES OF DISCIPLINE IN THE MARKETS ARE RELATED TO ADDICTIVE PATTERNS OF BEHAVIOUR.
An addiction occurs when an activity provides a strong source of stimulation that, over time, a person becomes psychologically and sometimes physically dependent upon. We generally label a behavior as an addiction when people seek out the activity even in the face of demonstrable negative consequences. It is the inability to stop the activity when those consequences interfere with life that marks any addiction.
Let’s look at statistics:
According to research 2 million adults (1% of the population) meet the diagnostic criteria for pathological gambling. Another 4-8 million adults (2-4% of the population) can be considered problem gamblers who are experiencing direct problems as a consequence of gambling. Trading fits into this category. When you enter the market with the pure intention of making as much money as possible, this is gambling. There is no plan, no structure, no goal. The expectations of limitless wealth dance before your eyes and what keeps you hooked is the occasional ‘big fish’ you catch. What is ignored are the overwhelming ones that escape.
In psychological terms this is known as ‘Random Reinforcement’. Random Reinforcement’ can be defined as: ‘having behaviours reinforced with positive or negative results on an inconsistent basis’. So today we perform a certain action and are rewarded for it. The same thing happens tomorrow, but then on the next day, we perform the same action and are punished for it. And so on, in a random manner. This makes effective learning impossible. In the market we cannot avoid this situation. All we can do is recognise it, stick with our rules and discipline and detach ourselves from the money. You have to feel good about your trading, not whether you made or lost money, but on your ability to stick to your rules. Rules and discipline are the only consistent things in an inconsistent darwinian environment.
Further research in psychology and psychiatry finds that between 14 and 16 million Americans meet diagnostic criteria for alcohol abuse or dependence. Between 4-6 million Americans are dependent upon illegal drugs.
Rates of substance abuse among men ages 18-44 are double those of the general population.
A family history of addictive problems is one of the best predictors of risk for addiction. peer influence is another significant risk factor.
According to a research review in the Oxford Textbook, rates of depression are significantly higher among people with addictions than in the general population, with indications that people are using the addictive activities to medicate themselves for the pain of depression. suicide statistics for addicts are high as they often see no other solution to their addiction. this fact is quite pertinent in the present global economic downturn. how many have taken their lives in the past months as their ‘empires’ have collapsed? their addiction to the rushes of adrenaline caused by high-risk thrill-seeking behaviour, without regard for the consequences to themselves or others, has proved as fatal as any other poisonous drug.
Addictions are also most common among individuals with attention deficits and hyperactivity problems and appear to be related to sensation-seeking among those needing stimulation.
Even if we assume that traders do not have more frequent addictive behaviors than the general population, the statistics tell us that, in all likelihood, nearly one trader in every ten has a diagnosable addictive problem.
For the trader with attention deficits who cannot tolerate boredom or lack of stimulation, forex trading provides action.
For the trader who is depressed, trading can provide an escape from the self and a sense of immediate gratification.
Such traders need to trade and keep trading when they have no edge whatsoever.
They lose their money, generate failure experiences for themselves, and create hardships for their families.
For them, it’s not about “discipline” and following trading rules. For the addict, such efforts are useless. The only solution is getting their lives back. And getting the right kind of help. If you see any aspect of yourself in this portrait, do the right thing. for you, and also for those who love you. Trading should expand your control and self-mastery, not become an instrument for their destruction. The sole purpose of trading is to make money, not to feed an emotional deficit.
One question i put to you: ‘what would you do if you could not trade?’ If you draw a blank, you are in trouble. It is like asking the alcoholic ‘what would you do if you had to stop drinking?’ The answer to the latter is usually ‘life is not worth living’. Ask yourself….has trading become so much part of my life that I could not live without it? What would I do INSTEAD of trading if I had to?
Advanced Price Action in forex trading
Price Action Explained - Article By Chris Capre - Founder of Second Skies LLC.
One of the most challenging frontiers for Forex traders has been interpreting Price Action without the known presence of order flow. Although there are many methods which dip their fingers into the toppings of the pie and get a taste of the price action , none of them seem to get fully into the bedrock of our subject - into the actual ingredients of price action.
What is Price Action?
Price action is essentially the closest relative to order flow in Forex and across all markets. It is the direct result of order flow. Thus, it has the fingerprints of bias, speed of buying/selling, where buying and selling is occurring (support/resistance) when a breakout is genuine and where a likely reversal is occurring. From the continuous flow of price action which pours onto our charts, all indicators are born and thus dependent upon it. Hence, understanding and being able to interpret price action becomes an essential component to our trading. It is a way to get into the essence behind what creates the indicators and most technical signals in the markets.
The 4 Staples
Since there have been countless books, articles, etc. written on how to find and use support and resistance levels, lets dive into four unique methods or staples for understanding price action.
1) Impulsive vs Corrective
Although I dont promote the use of Eliot wave, Elliot Wave theory had the wisdom and insight to examine the difference between moves. The two essential moves everyone sees is either an Impulsive move or a Corrective move.
Impulsive Moves
An impulsive move is characterized by a forceful or strong move in one direction. It is quite fast and powerful, thus producing some of the larger candles in a set albeit any time frame. It is also usually followed by several candles moving in one direction, or the bulk of them in a move. The candles are often signified by closes towards the top or bottom of the candle, depending upon the direction of the impulsive move.
They are ultimately created by a large amount of capital with the buyers/sellers coming in at a particular level with a specific direction in mind. The other scenario is they are created due to a price cascade, via tripping up large stops and, thus, removing the defenses to the upside or downside of a support or resistance level, creating an imbalance to the order books. Impulsive moves can happen on any time frame.
Figure 1 illustrates a recent impulsive dive in the EUR/USD. In this 1 hr chart, notice how the move starts with the largest candle in the entire down move and the close being towards the bottom of the candle (signaling constant selling pressure for the entire hour).
Also notice how before, the move is a mix of red/blue candles, but once the impulsive move begins, we have six red candles in a row.
This move sends this pair on a capitulaiton lower from 1.5928 to 1.5756 (172 pips) in a matter of 6 hours. The daily ATR (average true range) for this pair was clocking in at 133 pips from top to bottom on a daily basis, but in 6 hours it moved more than the average daily range by almost 22%. This is a great example of an impulsive move.
These are the types of moves we want to be in. They are the moves where the order flow is most consistent and heavily biased in one direction. Its no secret the larger players move the market. Thus, being able to identify impulsive moves and riding such waves give us some of the best trading opportunities.
Congested Corrective Moves
Corrective moves are the most common moves to follow an impulsive move. They are practically the inverse of impulsive moves. The candle bodies are usually smaller in nature with closes not particularly aligned to the top or bottom. They are usually a mixed bag of fruit with both up and down candles and generally have little or no bias. It is important to identify these because they are the prelude to the next impulsive move.
From an order flow perspective, they are usually created by one of two scenarios: 1) profit taking after an impulsive move with few significant buyers/sellers coming in to challenge the previous move, or 2) a clear mix of buyers and sellers residing at the same place and a potential reversal point. More often than not, a corrective move following an impulsive move is usually a continuation move.
In Figure 2 we are looking at the same EUR/USD move which displays the corrective move before the large triple landing dive for this pair, followed by another corrective move and then further selling.
Remember, when trading, we want the order flow bias to be heavily in our favor. Corrective moves offer little bias with order books closely aligned to 50% buyers and sellers. Even in the better case scenarios with a 60/40 tilt, you still have a much higher percentage of players on the other side of the market, moving the price action in the opposite direction of your trade. Ideally, we want the highest tilt available and corrective moves in and of themselves do not offer this for us as forex traders.
The next two forex methods are interesting
2) Pips Gained vs. Pips Lost
Looking at figure 3, we can see the NZDJPY pair was on a heavy decline from just above 85.00, falling all the way down to 68.00. The pair had bounced off the lows 400 pips to challenge the 72 figure. After a little dip, the pair re-attacked the 72 level and looked to break to the upside. There was also the presence of a small Inverted Head and Shoulders pattern which is a clear reversal pattern.
In front of all this, I would stil feel bearish. Regardless of the top from this down move (87.05), the pair had started the year at 80.48 with the current price being 72.15 on the close of the then current day. The pair had ultimately lost 833 pips on the year. The price action had suggested for the bulk of the year, traders were much more apt to be selling instead of buying. Furthermore, using our impulsive vs. corrective analysis, the most impulsive moves for the six months of price action were clearly to the downside, with the series of moves having more consistency in the sell-offs vs. the buy-ups.
Given the chart, you would umtimatley be favoring selling this forex pair. The pair then further declined 340 pips over the next two weeks. Being long the pair at that time was clearly not the option.
Thus, we can see how measuring pips gained vs. lost gives an insight into where the previous buying and selling had occurred and where the next likely move is. Another stellar example of this is the USD/CAD.
In the late summer of 2007, the USD/CAD (figure 4) had started to show some bottoming after a torrential sell-off. After some consolidation, the pair sold off from 1.1800 to 1.0400 in a period of 4 months. This was a merciless move that could find nobody willing to step in front of the locomotive selling. The pair finally found a decent floor after bouncing off the 1.0400 handle and settled between 1.0500 and 1.0700. At this time, hundreds of technicians and economists, still baffled by the overextended downtrend and momentum of this move, were calling for a reversal, at least in the short term. Now consider some very important questions using the pips gained vs. lost method.
The pair sold off roughly 1400 pips in 4 months and was down about 1100 for the year. On top of that, it was only 4.5 years ago the pair was at 1.6000 (5500 pips ago) and had yet to complete anything greater than a 50% retracement of any major leg, with each retracement going to its corresponding extension. In light of all that, why in the world would anyone be paying attention to indicators and their over-extension since the pair had no regard for them? Furthermore, who in the last 4 years made significant money buying the USD/CAD? And since the order books/price action were completely dominated by an overwhelming pips lost vs. pips gained, who could even think about buying or a reversal until we have a clear bottom, albeit an activated reversal pattern or a 61.8% fib break of any major leg? The answer was obvious – keep selling until proven otherwise since that is where the price action had reigned king and had yet to be dethroned.
Measuring pips gained vs. pips lost gives us a pure look at where the order flow is most consistent leading up to the current day/time. This method is very powerful over longer time frames, but is incredibly helpful on shorter intraday times as well. Be wary of trading in front of serious moves where the pips gained vs. lost is against you.
3) Counting Candles
Counting candles in a series or leg of a move can be useful on many fronts. First, it can tell you how many weeks/days/hours/minutes a pair has been bought up or sold off. If you are looking at an entire year, this can be very helpful in identifying where the clear buying/selling pressure is likely to continue. Even on intraday moves, this has potency. It also gives you a rough idea for a particular leg, what the percentage is you will make money on that candle, or lose money.
A look at figure 5 ushers some insight into this. Looking at our NZD/JPY daily chart, while heading into this trade, for the year the pair had 59 red candles and 52 blue candles. That meant on any given day up till that point in 2006, there was about a 50% chance of making money if you entered and exited the position on the beginning and ending of each day. However, using the pips gained vs. lost method, the 50% became much more heavily weighted to the downside suggesting if you sold on any day and were correct, you would make more money. The counting candles gave us an initial % value to the likelihood of our trade being successful, but combined with another method, increased the value of our short position significantly.
4) Time Variables
Pattern recognition and Elliot wave methods do a solid job of bringing in time variables into trading, but they leave many details into question. Two methods to working with time variables are listed below.
a) Time lapse/display for patterns
When looking at a pattern, albeit Head and Shoulders or IHS, wedges/triangles, or even consolidations, it is important to examine the time lapse/display involved and how it should play itself out.
The GBP/JPY from late 06’ to the beginning of 08’ was forming a large Head and Shoulders pattern. This was heavily watched by technicians as the break was suggestive to be massive with the distance between the head and neckline roughly 2900 pips. What was more interesting was the time displayed in the formation of the pattern.
Looking at figure 6, notice the vertical lines which identify the touchdowns where the beginning and ending of each shoulder was made. The left shoulder from initial floor around 221.41, to its rise and fall back down to the same level took about 4 months and 3 weeks. What was tough for traders to figure out was when the right shoulder was forming, particularly if the second touchdown on 221.41 in late November was going to be the last stand at the OK Corral. Notice how the pair bounced just a bit, and then re-attacked the same price level to easily break it the 2nd time around. When the RS was forming, the space or time displayed between the 1st/2nd touchdown was only about 3 months, yet the initial LS took 4 months and 3 weeks suggesting the RS should take about the same amount of time to form.
If you look at when the pair finally activated the break of the neckline, the time lapse or display was 4 months, and 2.3 weeks. This is very common amongst patterns - to have a consistent time lapse or display within themselves. Some other notables are wedges and triangles which usually complete or exit their patterns between 2/3rds and 3/4ths of the move. Rarely ever do they go to completion.
b) Length of consolidation
One other important time variable is how long a consolidation is forming. The larger the consolidation, the greater the probability the ensuing breakout will be legitimate and powerful. Breakouts are such a mystery to so many traders. Measuring the length of the consolidation can provide us powerful insights into this trading conundrum.
Taking a look at the EUR/USD in figure 7, on July 10th, 2008 the pair had opened the European session at 1.5724, dipped to the round number at 1.5700 and then come early NY session was bought up in solid fashion up to the 1.5800 handle. This 100 pip move occurred over 3 hours, where it not surprisingly tapered back a bit at the London close. The pair then consolidated from 9am PST within a 36 pip range for the next 18 hours.
While it is not surprising there was no breakout during the Asian session, what is interesting is that from Noon – 4pm EST, where there is still plenty of liquidity, the pair could not find any new buyers/sellers. For the next 13 hours, the pair still trotted in place not just through the Asian order books, but also through the first four hours of the European session. That means through three sets of different order books/interest, the pair was hemmed in a 36 pip range and nobody could alter this for a total of 18 hours. When you see a consolidation for that long a period of time, expect a significant breakout to occur.
The following breakout gave us a nice retest of the previous resistance level and then generated a 160 pip move in roughly 4 hours. This was the largest single day climb of the week and ironically followed the longest consolidation of that week.
One last example of this method can be delivered via the EUR/CAD (figure 8). In the fall of 2006, this pair had entered a really tight consolidation between the end of August to the beginning of November, encroached between 1.4060 - 1.4350 (290 pip range). This was the tightest 60 day plus range over the last 4 years. With the Bollinger Bands applying their python like constriction, a large breakout was calling out to most traders. When the pair finally did breakout, it gave us a handsome retest of the previous 70day resistance level, and then went on a Himalayan trek for a 1000 pip climb in only one month. Being able to identify long consolidations can point us towards legitimate and powerful breakouts
In Summary
Although there are many great methods for gleaning solid information out of price action (candlesticks, Elliot wave, pattern recognition), it is important we reach deeper into one of the most unexplored areas of technical analysis – that of understanding and interpreting price action. Being the closest relative to order flow and the mother of all technical indicators, a continual and intensive study of price action can only provide us with some of the most important gems of information to support our trading decisions.
The 4 staples or methods listed above are designed to give the traders a unique set of tools for approaching their charts and building a recipe for solid trades. Through the lens of these and other methods, ones trading can be vaulted to another level of insight, ability and success in trading the Forex market. More in depth information on price action and real world trading examples can be found throughout this website.
One of the most challenging frontiers for Forex traders has been interpreting Price Action without the known presence of order flow. Although there are many methods which dip their fingers into the toppings of the pie and get a taste of the price action , none of them seem to get fully into the bedrock of our subject - into the actual ingredients of price action.
What is Price Action?
Price action is essentially the closest relative to order flow in Forex and across all markets. It is the direct result of order flow. Thus, it has the fingerprints of bias, speed of buying/selling, where buying and selling is occurring (support/resistance) when a breakout is genuine and where a likely reversal is occurring. From the continuous flow of price action which pours onto our charts, all indicators are born and thus dependent upon it. Hence, understanding and being able to interpret price action becomes an essential component to our trading. It is a way to get into the essence behind what creates the indicators and most technical signals in the markets.
The 4 Staples
Since there have been countless books, articles, etc. written on how to find and use support and resistance levels, lets dive into four unique methods or staples for understanding price action.
1) Impulsive vs Corrective
Although I dont promote the use of Eliot wave, Elliot Wave theory had the wisdom and insight to examine the difference between moves. The two essential moves everyone sees is either an Impulsive move or a Corrective move.
Impulsive Moves
An impulsive move is characterized by a forceful or strong move in one direction. It is quite fast and powerful, thus producing some of the larger candles in a set albeit any time frame. It is also usually followed by several candles moving in one direction, or the bulk of them in a move. The candles are often signified by closes towards the top or bottom of the candle, depending upon the direction of the impulsive move.
They are ultimately created by a large amount of capital with the buyers/sellers coming in at a particular level with a specific direction in mind. The other scenario is they are created due to a price cascade, via tripping up large stops and, thus, removing the defenses to the upside or downside of a support or resistance level, creating an imbalance to the order books. Impulsive moves can happen on any time frame.
Figure 1 illustrates a recent impulsive dive in the EUR/USD. In this 1 hr chart, notice how the move starts with the largest candle in the entire down move and the close being towards the bottom of the candle (signaling constant selling pressure for the entire hour).
Also notice how before, the move is a mix of red/blue candles, but once the impulsive move begins, we have six red candles in a row.
This move sends this pair on a capitulaiton lower from 1.5928 to 1.5756 (172 pips) in a matter of 6 hours. The daily ATR (average true range) for this pair was clocking in at 133 pips from top to bottom on a daily basis, but in 6 hours it moved more than the average daily range by almost 22%. This is a great example of an impulsive move.
These are the types of moves we want to be in. They are the moves where the order flow is most consistent and heavily biased in one direction. Its no secret the larger players move the market. Thus, being able to identify impulsive moves and riding such waves give us some of the best trading opportunities.
Congested Corrective Moves
Corrective moves are the most common moves to follow an impulsive move. They are practically the inverse of impulsive moves. The candle bodies are usually smaller in nature with closes not particularly aligned to the top or bottom. They are usually a mixed bag of fruit with both up and down candles and generally have little or no bias. It is important to identify these because they are the prelude to the next impulsive move.
From an order flow perspective, they are usually created by one of two scenarios: 1) profit taking after an impulsive move with few significant buyers/sellers coming in to challenge the previous move, or 2) a clear mix of buyers and sellers residing at the same place and a potential reversal point. More often than not, a corrective move following an impulsive move is usually a continuation move.
In Figure 2 we are looking at the same EUR/USD move which displays the corrective move before the large triple landing dive for this pair, followed by another corrective move and then further selling.
Remember, when trading, we want the order flow bias to be heavily in our favor. Corrective moves offer little bias with order books closely aligned to 50% buyers and sellers. Even in the better case scenarios with a 60/40 tilt, you still have a much higher percentage of players on the other side of the market, moving the price action in the opposite direction of your trade. Ideally, we want the highest tilt available and corrective moves in and of themselves do not offer this for us as forex traders.
The next two forex methods are interesting
2) Pips Gained vs. Pips Lost
Looking at figure 3, we can see the NZDJPY pair was on a heavy decline from just above 85.00, falling all the way down to 68.00. The pair had bounced off the lows 400 pips to challenge the 72 figure. After a little dip, the pair re-attacked the 72 level and looked to break to the upside. There was also the presence of a small Inverted Head and Shoulders pattern which is a clear reversal pattern.
In front of all this, I would stil feel bearish. Regardless of the top from this down move (87.05), the pair had started the year at 80.48 with the current price being 72.15 on the close of the then current day. The pair had ultimately lost 833 pips on the year. The price action had suggested for the bulk of the year, traders were much more apt to be selling instead of buying. Furthermore, using our impulsive vs. corrective analysis, the most impulsive moves for the six months of price action were clearly to the downside, with the series of moves having more consistency in the sell-offs vs. the buy-ups.
Given the chart, you would umtimatley be favoring selling this forex pair. The pair then further declined 340 pips over the next two weeks. Being long the pair at that time was clearly not the option.
Thus, we can see how measuring pips gained vs. lost gives an insight into where the previous buying and selling had occurred and where the next likely move is. Another stellar example of this is the USD/CAD.
In the late summer of 2007, the USD/CAD (figure 4) had started to show some bottoming after a torrential sell-off. After some consolidation, the pair sold off from 1.1800 to 1.0400 in a period of 4 months. This was a merciless move that could find nobody willing to step in front of the locomotive selling. The pair finally found a decent floor after bouncing off the 1.0400 handle and settled between 1.0500 and 1.0700. At this time, hundreds of technicians and economists, still baffled by the overextended downtrend and momentum of this move, were calling for a reversal, at least in the short term. Now consider some very important questions using the pips gained vs. lost method.
The pair sold off roughly 1400 pips in 4 months and was down about 1100 for the year. On top of that, it was only 4.5 years ago the pair was at 1.6000 (5500 pips ago) and had yet to complete anything greater than a 50% retracement of any major leg, with each retracement going to its corresponding extension. In light of all that, why in the world would anyone be paying attention to indicators and their over-extension since the pair had no regard for them? Furthermore, who in the last 4 years made significant money buying the USD/CAD? And since the order books/price action were completely dominated by an overwhelming pips lost vs. pips gained, who could even think about buying or a reversal until we have a clear bottom, albeit an activated reversal pattern or a 61.8% fib break of any major leg? The answer was obvious – keep selling until proven otherwise since that is where the price action had reigned king and had yet to be dethroned.
Measuring pips gained vs. pips lost gives us a pure look at where the order flow is most consistent leading up to the current day/time. This method is very powerful over longer time frames, but is incredibly helpful on shorter intraday times as well. Be wary of trading in front of serious moves where the pips gained vs. lost is against you.
3) Counting Candles
Counting candles in a series or leg of a move can be useful on many fronts. First, it can tell you how many weeks/days/hours/minutes a pair has been bought up or sold off. If you are looking at an entire year, this can be very helpful in identifying where the clear buying/selling pressure is likely to continue. Even on intraday moves, this has potency. It also gives you a rough idea for a particular leg, what the percentage is you will make money on that candle, or lose money.
A look at figure 5 ushers some insight into this. Looking at our NZD/JPY daily chart, while heading into this trade, for the year the pair had 59 red candles and 52 blue candles. That meant on any given day up till that point in 2006, there was about a 50% chance of making money if you entered and exited the position on the beginning and ending of each day. However, using the pips gained vs. lost method, the 50% became much more heavily weighted to the downside suggesting if you sold on any day and were correct, you would make more money. The counting candles gave us an initial % value to the likelihood of our trade being successful, but combined with another method, increased the value of our short position significantly.
4) Time Variables
Pattern recognition and Elliot wave methods do a solid job of bringing in time variables into trading, but they leave many details into question. Two methods to working with time variables are listed below.
a) Time lapse/display for patterns
When looking at a pattern, albeit Head and Shoulders or IHS, wedges/triangles, or even consolidations, it is important to examine the time lapse/display involved and how it should play itself out.
The GBP/JPY from late 06’ to the beginning of 08’ was forming a large Head and Shoulders pattern. This was heavily watched by technicians as the break was suggestive to be massive with the distance between the head and neckline roughly 2900 pips. What was more interesting was the time displayed in the formation of the pattern.
Looking at figure 6, notice the vertical lines which identify the touchdowns where the beginning and ending of each shoulder was made. The left shoulder from initial floor around 221.41, to its rise and fall back down to the same level took about 4 months and 3 weeks. What was tough for traders to figure out was when the right shoulder was forming, particularly if the second touchdown on 221.41 in late November was going to be the last stand at the OK Corral. Notice how the pair bounced just a bit, and then re-attacked the same price level to easily break it the 2nd time around. When the RS was forming, the space or time displayed between the 1st/2nd touchdown was only about 3 months, yet the initial LS took 4 months and 3 weeks suggesting the RS should take about the same amount of time to form.
If you look at when the pair finally activated the break of the neckline, the time lapse or display was 4 months, and 2.3 weeks. This is very common amongst patterns - to have a consistent time lapse or display within themselves. Some other notables are wedges and triangles which usually complete or exit their patterns between 2/3rds and 3/4ths of the move. Rarely ever do they go to completion.
b) Length of consolidation
One other important time variable is how long a consolidation is forming. The larger the consolidation, the greater the probability the ensuing breakout will be legitimate and powerful. Breakouts are such a mystery to so many traders. Measuring the length of the consolidation can provide us powerful insights into this trading conundrum.
Taking a look at the EUR/USD in figure 7, on July 10th, 2008 the pair had opened the European session at 1.5724, dipped to the round number at 1.5700 and then come early NY session was bought up in solid fashion up to the 1.5800 handle. This 100 pip move occurred over 3 hours, where it not surprisingly tapered back a bit at the London close. The pair then consolidated from 9am PST within a 36 pip range for the next 18 hours.
While it is not surprising there was no breakout during the Asian session, what is interesting is that from Noon – 4pm EST, where there is still plenty of liquidity, the pair could not find any new buyers/sellers. For the next 13 hours, the pair still trotted in place not just through the Asian order books, but also through the first four hours of the European session. That means through three sets of different order books/interest, the pair was hemmed in a 36 pip range and nobody could alter this for a total of 18 hours. When you see a consolidation for that long a period of time, expect a significant breakout to occur.
The following breakout gave us a nice retest of the previous resistance level and then generated a 160 pip move in roughly 4 hours. This was the largest single day climb of the week and ironically followed the longest consolidation of that week.
One last example of this method can be delivered via the EUR/CAD (figure 8). In the fall of 2006, this pair had entered a really tight consolidation between the end of August to the beginning of November, encroached between 1.4060 - 1.4350 (290 pip range). This was the tightest 60 day plus range over the last 4 years. With the Bollinger Bands applying their python like constriction, a large breakout was calling out to most traders. When the pair finally did breakout, it gave us a handsome retest of the previous 70day resistance level, and then went on a Himalayan trek for a 1000 pip climb in only one month. Being able to identify long consolidations can point us towards legitimate and powerful breakouts
In Summary
Although there are many great methods for gleaning solid information out of price action (candlesticks, Elliot wave, pattern recognition), it is important we reach deeper into one of the most unexplored areas of technical analysis – that of understanding and interpreting price action. Being the closest relative to order flow and the mother of all technical indicators, a continual and intensive study of price action can only provide us with some of the most important gems of information to support our trading decisions.
The 4 staples or methods listed above are designed to give the traders a unique set of tools for approaching their charts and building a recipe for solid trades. Through the lens of these and other methods, ones trading can be vaulted to another level of insight, ability and success in trading the Forex market. More in depth information on price action and real world trading examples can be found throughout this website.
Dont Trade News - Trade Price Action Instead
Dont Trade The News - Trade Price Action
Many traders get stuck in the trap of trading the news by over analyzing every single economic report that comes out and trying to guess what the market will do in response to it. It is very easy to develop this bad habit if you do not have a clear understanding of why trading the news is dangerous and essentially pointless. If you are basing your trading decisions off what you think will happen after an economic report comes out than you are just guessing and really have no better chance at a winning trade than if you were to flip a coin. Let’s discuss the reasons why trading the news can be one of the worst things you can do for your trading account.
First off, markets move on expectations of future events, often when the actual event or news release happens the move is either over or ready to come roaring back the opposite direction that the news report implied. This is why you may have heard the term “buy the rumor sell the fact”. However, it is very easy to get sucked into the trap of fixating yourself on one specific economic report that looks like it could really move the market in a certain direction. Once you convince yourself that what you expect to happen based on a news event is what most likely will happen, you have basically dug your own grave for your trading account.
You can avoid this entire trading pitfall of trading the news by remembering two things; price action reflects everything that is happening in the markets, and prices are contrarian. Price action analysis will show you the likely direction the market is expecting before any economic report is released. My forex trading course will give you specific setups and a unique way of looking at the market via price action analysis that will allow you to make your trading decisions based off the real and solid data reflected on the chart. Price action contains all the information you need to be a successful forex trader. You do not need to over analyze every single economic indicator and pull your hair out with frustration by trying to figure out what will happen next. The only thing you need is price action analysis. I have been consistently profiting from price action for years without even so much as a thought about economic releases.
Prices in any market are inherently contrarian. This means that usually price will do the opposite of what it appears should logically happen next. This is why many beginning traders have so much trouble and lose all their money and then some. You really need to understand that often when it looks safe to enter a trade, or a market is breaking to new highs or new lows, this is the exact time the amateurs are getting on board because they feel safe about entering. They are trading off of emotion because have they have no real game plan or trading strategy. Price action will tip you off when a move has run its course or when the dominant trend is ready to resume. There are specific price action strategies that I demonstrate in my forex trading course that will give you the edge you need to survive and thrive in the contrarian world of forex trading. I can tell you from personal experience if you try to trade based off emotion with no real education in price action you will end up buying tops and selling bottoms. Markets are by nature extremely contrarian and the only real way to read what the charts are telling you is by analyzing and developing a trading method around price action.
My trading course is designed to give you the knowledge you need to trade the markets. We have all heard the acronym KISS; keep it simple stupid, well this is extremely relevant and applicable to trading. There is so much misinformation out there and so many people trying to sell you crap that you do not need to be a successful trader that it’s no wonder most people lose all their trading money and end up quitting. Price action analysis will be you’re inside guide to the markets, often over looked and under used, it is really all you need to consistently profit in the markets. Stop losing your money, turn off CNBC, and stop giving yourself analysis paralysis by trying to keep up with every little economic news release. Instead, get yourself a solid education in price action analysis and it is all you will ever need to unlock your potential in the market.
Many traders get stuck in the trap of trading the news by over analyzing every single economic report that comes out and trying to guess what the market will do in response to it. It is very easy to develop this bad habit if you do not have a clear understanding of why trading the news is dangerous and essentially pointless. If you are basing your trading decisions off what you think will happen after an economic report comes out than you are just guessing and really have no better chance at a winning trade than if you were to flip a coin. Let’s discuss the reasons why trading the news can be one of the worst things you can do for your trading account.
First off, markets move on expectations of future events, often when the actual event or news release happens the move is either over or ready to come roaring back the opposite direction that the news report implied. This is why you may have heard the term “buy the rumor sell the fact”. However, it is very easy to get sucked into the trap of fixating yourself on one specific economic report that looks like it could really move the market in a certain direction. Once you convince yourself that what you expect to happen based on a news event is what most likely will happen, you have basically dug your own grave for your trading account.
You can avoid this entire trading pitfall of trading the news by remembering two things; price action reflects everything that is happening in the markets, and prices are contrarian. Price action analysis will show you the likely direction the market is expecting before any economic report is released. My forex trading course will give you specific setups and a unique way of looking at the market via price action analysis that will allow you to make your trading decisions based off the real and solid data reflected on the chart. Price action contains all the information you need to be a successful forex trader. You do not need to over analyze every single economic indicator and pull your hair out with frustration by trying to figure out what will happen next. The only thing you need is price action analysis. I have been consistently profiting from price action for years without even so much as a thought about economic releases.
Prices in any market are inherently contrarian. This means that usually price will do the opposite of what it appears should logically happen next. This is why many beginning traders have so much trouble and lose all their money and then some. You really need to understand that often when it looks safe to enter a trade, or a market is breaking to new highs or new lows, this is the exact time the amateurs are getting on board because they feel safe about entering. They are trading off of emotion because have they have no real game plan or trading strategy. Price action will tip you off when a move has run its course or when the dominant trend is ready to resume. There are specific price action strategies that I demonstrate in my forex trading course that will give you the edge you need to survive and thrive in the contrarian world of forex trading. I can tell you from personal experience if you try to trade based off emotion with no real education in price action you will end up buying tops and selling bottoms. Markets are by nature extremely contrarian and the only real way to read what the charts are telling you is by analyzing and developing a trading method around price action.
My trading course is designed to give you the knowledge you need to trade the markets. We have all heard the acronym KISS; keep it simple stupid, well this is extremely relevant and applicable to trading. There is so much misinformation out there and so many people trying to sell you crap that you do not need to be a successful trader that it’s no wonder most people lose all their trading money and end up quitting. Price action analysis will be you’re inside guide to the markets, often over looked and under used, it is really all you need to consistently profit in the markets. Stop losing your money, turn off CNBC, and stop giving yourself analysis paralysis by trying to keep up with every little economic news release. Instead, get yourself a solid education in price action analysis and it is all you will ever need to unlock your potential in the market.
Price Action - Price Action Explained
What is price action?
Price action is the behavior of price of a specific currency, commodity, stock or other trading instrument over a specified period of time. Price action analysis deals with the predictive capacity of specific price patterns that occur on a semi-regular basis over a given period of time. Certain price patterns re-occur in the markets and can be used to develop a rule-based system.
Price action analysis allows you to see exactly what is happening in any given market. Price action is the visual trail of the supply and demand situation of the given trading instrument over a specified period of time. Price reflects the expectations and beliefs of all market players; the bigger more informed players obviously leave a more noticeable trail, so by analyzing the behavior of price over a specified period of time we can make an educated guess as to what those “in the know” are doing in the markets.
As retail forex traders, our goal is to jump aboard the price trail left by bigger players who have the power to move the market. By building our price action trading system around a few time tested and repetitive setups we give our selves the best shot at riding the momentum of the market to consistent profits. There are certain things that happen over and over in the markets as a function of their very nature.
Most people who have traded actively for any length of time will attest to the fact that trading is about 80 or 90 percent psychological and 10 to 20 percent method. Most traders start off by thinking it is the other way around and thus end up losing money and finding themselves losing what seems like a constant fight against the market. What price action analysis provides for you is a simple, straight forward, and most of all, effective method that allows you to focus your energy and time on the more important psychological side of trading. If we as technical traders are primarily basing all of our trading ideas off of charts then why would we confuse and frustrate ourselves with anything but what the chart is made of which is of course price action?
In order to master the markets we need to root our methods of trading in consistency. In fact, all of our trading activities need to be consistent if we are to truly be consistently profitable traders. Price action analysis gives you the know how to recognize specific price patterns that happen over and over in the market. This gives you the key to consistency that so many traders desire yet so few ever attain. Excellence in any profession is most often accompanied by great training and mentoring. To learn consistently profitable price action trading strategies you should learn from someone who trades with the exact same methods they teach. So get yourself a sold education in specific price action patterns and I promise that you will be well on the path to trading consistently.
Price action is the behavior of price of a specific currency, commodity, stock or other trading instrument over a specified period of time. Price action analysis deals with the predictive capacity of specific price patterns that occur on a semi-regular basis over a given period of time. Certain price patterns re-occur in the markets and can be used to develop a rule-based system.
Price action analysis allows you to see exactly what is happening in any given market. Price action is the visual trail of the supply and demand situation of the given trading instrument over a specified period of time. Price reflects the expectations and beliefs of all market players; the bigger more informed players obviously leave a more noticeable trail, so by analyzing the behavior of price over a specified period of time we can make an educated guess as to what those “in the know” are doing in the markets.
As retail forex traders, our goal is to jump aboard the price trail left by bigger players who have the power to move the market. By building our price action trading system around a few time tested and repetitive setups we give our selves the best shot at riding the momentum of the market to consistent profits. There are certain things that happen over and over in the markets as a function of their very nature.
Most people who have traded actively for any length of time will attest to the fact that trading is about 80 or 90 percent psychological and 10 to 20 percent method. Most traders start off by thinking it is the other way around and thus end up losing money and finding themselves losing what seems like a constant fight against the market. What price action analysis provides for you is a simple, straight forward, and most of all, effective method that allows you to focus your energy and time on the more important psychological side of trading. If we as technical traders are primarily basing all of our trading ideas off of charts then why would we confuse and frustrate ourselves with anything but what the chart is made of which is of course price action?
In order to master the markets we need to root our methods of trading in consistency. In fact, all of our trading activities need to be consistent if we are to truly be consistently profitable traders. Price action analysis gives you the know how to recognize specific price patterns that happen over and over in the market. This gives you the key to consistency that so many traders desire yet so few ever attain. Excellence in any profession is most often accompanied by great training and mentoring. To learn consistently profitable price action trading strategies you should learn from someone who trades with the exact same methods they teach. So get yourself a sold education in specific price action patterns and I promise that you will be well on the path to trading consistently.
Working
Hehehe.....working lei, same for tomorrow X'mas day and next week friday...which is on New Year day. That is life. I have no problem with that frankly since I don't have much of a life btw to bitch about. So...working is a norm to me be it on Chinese New Year day itself...no problem since both my parents are gone and the children also big now and they have plans of their own. Wife....same same as me, no life to talk about. Most likely to find us sitting and watching Korean drama and eating tit-bits hehehe.
To those....having a ball of a time during these busy time, cheers....do not over drink and have fun!
To those....having a ball of a time during these busy time, cheers....do not over drink and have fun!
Wednesday, December 23, 2009
How to Get Rich in 10-15 Years
What Does it Mean to be Wealthy?
Being wealthy has nothing to do with a set dollar amount or what car you drive or which labels you sport.
If the income and/or returns of your investments are more than twice the amount of your annual living costs, then you, my friend, are wealthy.
If you own a business and make millions of dollars, but the business will fail if you are not in it, then all you have is a very highly paid job.
Real wealth is about securing a stream of income for yourself that consistently throws off returns that are at least double your annual living expenses.
A Big Salary Doesn't Automatically Make You Rich
Getting rich takes a lot more than just securing a big income. Many who aspire to be multimillionaires stumble at this point.
They work hard, get promoted or build their businesses and start earning large amounts of money. but these "would-be" millionaires fail to fulfill their true wealth-building potential at this point.
You see, they get seduced by the illusions of wealth as portrayed by the aforementioned luxury-goods marketing machine that they see in magazines and on television.
Don't get me wrong; if you have a large income, you have a huge leg up over the person earning an average income. But if the odds hold true, then you are could blow that big advantage by overspending.
Are You an Aspirational Spender?
Aspirational spenders are above-average-income earners who yearn to possess the lifestyle of the truly wealthy but do not earn enough money to do so.
Instead, they employ credit card and home equity loan debt to acquire the trappings of wealth -- fancy cars, vacation homes, designer purses, designer suits etc.. They actively pretend (self-delude is a better word) that they are rich. This becomes an all-consuming pantomime of self-delusion, as more and more money is required to fuel this facade of wealth.
The aspirational spender typically earns between $100,000 and $150,000 per year. This is 2 1/2 to 4 times greater than the national average income.
In fact, it is more than enough of an income to get wealthy on within a 10-15 year period.
But these people never do develop real wealth.
Their incomes continue to grow, and they make terrific employees and are usually very good at their jobs, but their desires are always one step ahead of their income.
The Key to Developing Real Wealth
Many years ago, I read a book titled "The Richest Man in Babylon" by George S. Clason. In that book, I learned that I would never be able to satiate every single material desire that I have.
So, instead of trying to fulfill as many of my "wants" as possible, I started getting very picky about which "wants" I chose to indulge ... which "wants" I chose to postpone and which "wants" I chose to abandon.
Once I fully accepted that I'll never have every single thing that I may wish to possess, it was like a great weight was lifted off my shoulders; it was very freeing. It also allowed me to better appreciate what I already possessed.
But the most important thing it did was get me off the spending carousel and onto the road to living beneath my means ... and start saving and investing, which is the real route to obtaining large-scale sustainable wealth.
Your Desired Future is Just a Decade Away
Wealth can be created from any starting level; it is not income-dependent. However, in this article I want to highlight how much easier it is to get rich if you already have a large income.
It really doesn't matter which vehicle you use to create your wealth -- whether it be real estate, stocks, commodities, options or your own business. Any success that you find in any investment endeavor will be meaningless if you continue to spend more than you earn.
It is only when you start living beneath your means that you will truly be on the road to real wealth-creation.
If you earn over $150,000 a year, you have absolutely no excuse for not being rich!
What's the secret? All you have to do is live on 30% of your gross income and invest the rest.
Your 15-Year Plan to a Lifetime of Riches
At $150,000, assuming a 35% tax rate, your take-home pay would be a shade under $100,000.
If you want to get rich, start by simply living on $50,000 and investing the other $50,000. Do that for 10-15 years and you will be rich, period.
If you can average just a 12% compounded annual growth rate over 10 years, you'll have a shade under a million dollars.
Over 15 years, you'll have over $2 million -- two million dollars that is growing at 12% per year is more than enough money to last a lifetime.
That's it; pretty simple right?
Are You Ready to Sacrifice What You Want Now for What You'll Need Later?
So, what is the real way to measure personal wealth? The yardstick is whether our investment income covers our living expenses.
If it does, then you are well-off. If your investment income is 2x or more greater than your annual income, then you are well and truly rich!
I know I have now lost 99% of you. The thought of the relative deprivation that such living would require is probably too difficult for many of you to face squarely.
And that's OK; not everyone possesses the necessary discipline that it takes to acquire true wealth.
Don't beat yourself up about it. But, by the same token, don't fool yourself into thinking that you are rich just because you have a big salary, a shiny Benz and a nice sprawling McMansion.
We both know you are one pink slip away from financial Armageddon.
I'm here to tell you that you don't have to live that way anymore.
Downsizing is only painful when you are not emotionally prepared for it. Once you make the decision to be "for real" rich instead of "pretend" rich, the decision to downsize instead of "super-size" will be an easy one.
Downsizing Your Spending = Super-Sizing Your Wealth
Don't squander the opportunity that you've been given by being blessed with the ability to earn a large income. You have a huge edge over every other person earning less than you. You blow that edge when you over-spend and under-save.
Remember -- even if you win the lottery or increase your income dramatically, but refuse to spend less than you earn and refuse to save and invest surplus capital -- you will never be rich.
You will never experience true financial freedom, and you will always be at the mercy of your spending habits, your employer and the economy.
It's always a good time to re-evaluate your financial plan, but especially with the dawn of a new decade just around the corner, there's no time like the present to plan to become a millionaire. You'll thank yourself in 2020!
Being wealthy has nothing to do with a set dollar amount or what car you drive or which labels you sport.
If the income and/or returns of your investments are more than twice the amount of your annual living costs, then you, my friend, are wealthy.
If you own a business and make millions of dollars, but the business will fail if you are not in it, then all you have is a very highly paid job.
Real wealth is about securing a stream of income for yourself that consistently throws off returns that are at least double your annual living expenses.
A Big Salary Doesn't Automatically Make You Rich
Getting rich takes a lot more than just securing a big income. Many who aspire to be multimillionaires stumble at this point.
They work hard, get promoted or build their businesses and start earning large amounts of money. but these "would-be" millionaires fail to fulfill their true wealth-building potential at this point.
You see, they get seduced by the illusions of wealth as portrayed by the aforementioned luxury-goods marketing machine that they see in magazines and on television.
Don't get me wrong; if you have a large income, you have a huge leg up over the person earning an average income. But if the odds hold true, then you are could blow that big advantage by overspending.
Are You an Aspirational Spender?
Aspirational spenders are above-average-income earners who yearn to possess the lifestyle of the truly wealthy but do not earn enough money to do so.
Instead, they employ credit card and home equity loan debt to acquire the trappings of wealth -- fancy cars, vacation homes, designer purses, designer suits etc.. They actively pretend (self-delude is a better word) that they are rich. This becomes an all-consuming pantomime of self-delusion, as more and more money is required to fuel this facade of wealth.
The aspirational spender typically earns between $100,000 and $150,000 per year. This is 2 1/2 to 4 times greater than the national average income.
In fact, it is more than enough of an income to get wealthy on within a 10-15 year period.
But these people never do develop real wealth.
Their incomes continue to grow, and they make terrific employees and are usually very good at their jobs, but their desires are always one step ahead of their income.
The Key to Developing Real Wealth
Many years ago, I read a book titled "The Richest Man in Babylon" by George S. Clason. In that book, I learned that I would never be able to satiate every single material desire that I have.
So, instead of trying to fulfill as many of my "wants" as possible, I started getting very picky about which "wants" I chose to indulge ... which "wants" I chose to postpone and which "wants" I chose to abandon.
Once I fully accepted that I'll never have every single thing that I may wish to possess, it was like a great weight was lifted off my shoulders; it was very freeing. It also allowed me to better appreciate what I already possessed.
But the most important thing it did was get me off the spending carousel and onto the road to living beneath my means ... and start saving and investing, which is the real route to obtaining large-scale sustainable wealth.
Your Desired Future is Just a Decade Away
Wealth can be created from any starting level; it is not income-dependent. However, in this article I want to highlight how much easier it is to get rich if you already have a large income.
It really doesn't matter which vehicle you use to create your wealth -- whether it be real estate, stocks, commodities, options or your own business. Any success that you find in any investment endeavor will be meaningless if you continue to spend more than you earn.
It is only when you start living beneath your means that you will truly be on the road to real wealth-creation.
If you earn over $150,000 a year, you have absolutely no excuse for not being rich!
What's the secret? All you have to do is live on 30% of your gross income and invest the rest.
Your 15-Year Plan to a Lifetime of Riches
At $150,000, assuming a 35% tax rate, your take-home pay would be a shade under $100,000.
If you want to get rich, start by simply living on $50,000 and investing the other $50,000. Do that for 10-15 years and you will be rich, period.
If you can average just a 12% compounded annual growth rate over 10 years, you'll have a shade under a million dollars.
Over 15 years, you'll have over $2 million -- two million dollars that is growing at 12% per year is more than enough money to last a lifetime.
That's it; pretty simple right?
Are You Ready to Sacrifice What You Want Now for What You'll Need Later?
So, what is the real way to measure personal wealth? The yardstick is whether our investment income covers our living expenses.
If it does, then you are well-off. If your investment income is 2x or more greater than your annual income, then you are well and truly rich!
I know I have now lost 99% of you. The thought of the relative deprivation that such living would require is probably too difficult for many of you to face squarely.
And that's OK; not everyone possesses the necessary discipline that it takes to acquire true wealth.
Don't beat yourself up about it. But, by the same token, don't fool yourself into thinking that you are rich just because you have a big salary, a shiny Benz and a nice sprawling McMansion.
We both know you are one pink slip away from financial Armageddon.
I'm here to tell you that you don't have to live that way anymore.
Downsizing is only painful when you are not emotionally prepared for it. Once you make the decision to be "for real" rich instead of "pretend" rich, the decision to downsize instead of "super-size" will be an easy one.
Downsizing Your Spending = Super-Sizing Your Wealth
Don't squander the opportunity that you've been given by being blessed with the ability to earn a large income. You have a huge edge over every other person earning less than you. You blow that edge when you over-spend and under-save.
Remember -- even if you win the lottery or increase your income dramatically, but refuse to spend less than you earn and refuse to save and invest surplus capital -- you will never be rich.
You will never experience true financial freedom, and you will always be at the mercy of your spending habits, your employer and the economy.
It's always a good time to re-evaluate your financial plan, but especially with the dawn of a new decade just around the corner, there's no time like the present to plan to become a millionaire. You'll thank yourself in 2020!
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